RBI Poised to Cut CRR Before April 7 Policy Meeting: SBI’s Ghosh
(Bloomberg) -- Reduction in cash reserve ratio by the
central bank at this juncture will “have a profound impact on
transmission mechanism,” Soumya Kanti Ghosh, chief economic
adviser at the State Bank of India says in a note.
* Current RBI CRR rate is 4%
* Repo rate cut has only a signaling effect while CRR cut will
increase system liquidity and bring down cost of funds for
banks: Ghosh
* A 50 bps cut in CRR will release 457b rupees into the
system, says Ghosh, adding he expects RBI to cut CRR as a
prelude to April 7.
* NOTE: Rajan Cuts India Rates After Modi Agrees to Inflation
Target